Question

Simple interest on a certain sum of money for 4 years at 4% per annum exceeds the compound interest on the same sum for 3 years at 5 percent per annum by ₹228. Find the sum.

Answer 1

Let’s consider the principal as P, Given: R = 4% and T = 4 years for simple interest and R = 5% and T = 3 years for compound interest

Now, SI = (P x 4 x 4)/100 = 4P/25

And, CP = P (1 + 5/100)³ – P = P [(21/20) ³ - 1]

= P (9261/8000 - 1)

= 1261P/8000

Given: SI - CI = ₹228

So, 4P/25 - 1261P/8000 = 228

(4 x 320P – 1261P)/8000 = 228

19P = 228 x 8000

P = (228 x 8000)/19

= 96000

Thus, the principal sum is ₹96000